PM wins approval for price on carbon

Lenore Taylor

JULIA GILLARD'S carbon deal appears set to pass the Parliament with support from the independents as unreleased Treasury modelling predicts strong growth in one of the industries that has vowed to crush the plan.

The $50 billion coal industry is preparing an all-out fight against the ''Clean Energy'' package to be released on Sunday, including participating in a major anti-carbon tax advertising campaign.

But the Herald has learnt that Treasury modelling will show that under an indicative $20 carbon price, coal exports and production, although lower than without a tax, would still double during the next 40 years.

The executive director of the Australian Coal Association, Ralph Hillman, will begin the industry assault today in an address to the National Press Club, in which he will argue the carbon tax is a ''wealth redistribution exercise'' that will cost jobs but not reduce greenhouse emissions.

Related Content

But the anti-tax industries' aim of forcing the parliamentary defeat of the clean energy bills appears unlikely after the independents who sit on the multi-party climate committee - Tony Windsor and Rob Oakeshott - said they would vote for the deal.

That leaves its fate in the hands of the Tasmanian independent Andrew Wilkie, who said yesterday that he ''supported in principle'' pricing carbon but wanted protection for industries such as the Nyrstar zinc plant in his Hobart electorate.

Advertisement

Mr Wilkie said he wanted ''a high level of investment in renewable industries'' in Tasmania, recognition of the carbon-abating potential of Tasmania's forests and of the fact that the state's power was primarily ''clean'' hydro-electricity.

The general manager of Nyrstar Tasmania, Jeremy Kouw, said the soaring Australian dollar meant his company now needed ''full shielding'' from the carbon price, rather than the 95 per cent free permits it was offered under the Rudd government scheme.

Close to a deal ... with Tony Windsor and Rob Oakeshott on board, the fate of the carbon deal lies in the hands of Tasmanian independent Andrew Wilkie, who said he "supported in principle" a price on carbon. Photo: Alex Ellinghausen

Mr Wilkie discussed his concerns with the Prime Minister last night and Mr Kouw said he had recently met the Climate Change Minister, Greg Combet, and the Resources Minister, Martin Ferguson.

Ms Gillard warned her backbench yesterday that it would take months of campaigning to turn around Labor's electoral fortunes after the carbon deal was revealed. It is understood the deal will fully compensate almost seven out of 10 families for carbon costs. Mr Combet reassured nervous members holding manufacturing seats that the package would protect jobs.

The deal is understood to contain a special deal for the steel industry, with free permits and other measures to give almost total compensation in the initial years, and extra assistance for other manufacturers.

It is also understood to be proposing a compensation package for high-methane ''gassy'' coalmines of close to the $1.5 billion on offer last time. But the coal industry says that would still mean job losses because international competitors face no carbon taxes.

Treasury modelling for the Rudd government's scheme predicted a 66 per cent growth in coal production but that has been boosted by the strong terms of trade. Under the Rudd scheme the forecast increase was still 30 per cent lower than the industry would have enjoyed without a carbon price.

Ms Gillard will give an ''address to the nation'' televised on the ABC on Sunday night.

The Opposition Leader, Tony Abbott, attacked her for releasing the package after Parliament would have risen, but has delayed a trip next week to north Queensland.